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The Distributional Impact of the Pandemic

Author

Listed:
  • Hacioglu Sinem

    (Bank of England - Bank of England, King‘s College London)

  • Diego R Känzig

    (London Business School)

  • Paolo Surico

    (London Business School, CEPR - Center for Economic Policy Research)

Abstract
The top quartile of the income distribution accounts for almost half of the pandemic-related decline in aggregate consumption, with expenditure for this group falling much more than income. In contrast, the bottom quartile of the income distribution has seen the smallest spending cuts and the largest earnings drop but their total incomes have fallen by much less because of the increase in government benefits. The decline in consumers' spending preceded the introduction of the lockdown, whose partial lifting has triggered a stronger recovery in sectors with a lower contact rate. The largest spending contractions are concentrated in the most affluent regions. These conclusions are based on detailed high-frequency transaction data on spending, earnings and income from a large fintech company in the United Kingdom.

Suggested Citation

  • Hacioglu Sinem & Diego R Känzig & Paolo Surico, 2020. "The Distributional Impact of the Pandemic," Working Papers halshs-03028702, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03028702
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03028702
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    spending; earnings; income; benefits; heterogeneity; pandemic;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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